Canada tries to revive trade negotiations with US

(MENAFN) Canada has decided to halt its planned digital services tax (DST) targeting major tech companies, in an effort to revive stalled trade negotiations with the United States. The move comes just days before the tax was set to take effect.

Originally introduced under the previous government led by former Prime Minister Justin Trudeau, the 3% tax had been approved last year and was scheduled to apply retroactively to profits earned between 2022 and 2024. It was primarily aimed at large U.S.-based tech firms such as Amazon, Google, and Meta, with the estimated financial impact totaling around $3 billion.

“Today’s announcement will support a resumption of negotiations toward the July 21, 2025 timeline set out at this month’s G7 Leaders’ Summit in Kananaskis,” said Canadian Prime Minister Mark Carney in a statement released Sunday.

“Canada’s new government will always be guided by the overall contribution of any possible agreement to the best interests of Canadian workers and businesses,” he added.
Carney and U.S. President Donald Trump recently met during the G7 summit, where both leaders agreed to work toward finalizing a new economic agreement within 30 days.

Following the announcement, Finance Minister Francois-Philippe Champagne posted on social media that removing the tax would help Canada “make vital progress and reinforce our work to create jobs and build prosperity for all Canadians.”

Just two days earlier, President Trump had sharply criticized the DST, calling it a “direct and blatant attack on our country.” He threatened to cancel all ongoing trade negotiations and warned that new tariffs on Canadian exports would be imposed within a week if the tax went forward.

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